… Before something really bad happens

The house at the end of our alley has been vacant for almost four years and we — the neighbors and I — figure it's a matter of time before something bad happens.

A fire? Metal thieves? A child abduction?

Bad things happen when a house is allowed to sit empty month after month, season after season.

Cook County Circuit Court records show Charter One Bank filed for foreclosure in February 2008. The case has kicked around the docket month after month, motion after motion. A second lender, AmTrust Bank, also was involved, but went insolvent in 2009 and turned over its assets to a third bank, so it gets complicated.

Somebody still owns the house, though, because records show somebody still is paying property taxes on what was — and could again be — a handsome two-story, four-bedroom, red brick on Wesley Avenue in Evanston.

That's right, Evanston. Not some have-not city neighborhood like Chicago's Englewood or Austin, but on the "leafy" North Shore, an easy walk from Northwestern University and Lighthouse Beach.

Fact is, there now are 534 Evanston homes in some stage of mortgage foreclosure according to realtytrac.com, a website that keeps score. Hint: Go see for free how many homes in your ZIP code or suburb are among the 1.6 million nationwide being foreclosed or already bank-owned as of last week.

On Thursday, President Barack Obama is supposed to deliver a major speech about jobs and economic growth. That's great. I'm looking forward to it.

But Mr. President, sir, we're not going to get the economy moving again — creating jobs again — until we do something about foreclosures.

We're in vicious downward spiral. What began in 2005-06 as a rash of families who overreached or got hornswoggled by shady mortgage brokers has blown into a wider epidemic in which otherwise respectable middle-class folks are walking away from houses on which they owe more than the places are worth.

There is, however, precious little going on in Washington aimed at turning the situation around. The president's Home Affordable Modification Program, or HAMP, launched in early 2009 to pay lenders to work out troubled mortgages, has fallen way short. Of course it has. Banks would rather carry paper assets at face value for as long as they can than admit to credit markets that their portfolio of properties is labeled Potemkin.

So what's Obama to do? The situation calls for aggressive federal intervention — carrots and sticks — to get lenders to write-down and renegotiate mortgages. Lots of working families could handle a lower monthly payment. As for the empties, there are many idle developers and contractors ready to rehab and resell them … if they could buy at prices fully discounted to today's low values. Think of the jobs.

But massive federal intervention, in case you missed the debt-ceiling fiasco earlier this summer, isn't in the cards. Not with a U.S. House of Representatives run by anti-government Republicans who think they can cut, cut, cut the economy back to health. And not with a president who thinks such minds can be reasoned with.

But wait. A lot of failed and failing mortgages have ended up on the books of Fannie Mae and Freddie Mac. They buy mortgages from banks with funds raised by selling bonds to investors. Sure, Fannie and Freddie are getting stuck with billions — $141 billion at last count — in bad mortgages that taxpayers may have to cover. But it's also true that taxpayers will get hit even harder if someone doesn't step in and stop the housing market's downward spiral.

Unfortunately the government guy who oversees Fannie and Freddie is one Edward DeMarco, a career civil servant who directs the Federal Housing Finance Agency. He's determined not to throw good money after bad. After all, he reasons, his agency was created in 2008 to stop the bleeding.